Europe's cashless surge exposes hidden risks in digital wallet spending
Non-cash payments in Europe are rising fast, with card transactions up nearly 8% in early 2025. The European Central Bank's latest report recorded almost 30 billion card payments in the first half of the year. Yet as digital wallets grow, finance teams face new challenges in tracking and controlling spending.
The shift is clearest in the UK and Ireland, where cash now makes up less than 10% of payments. In Ireland alone, 87.9% of card transactions at point-of-sale terminals were contactless. But behind the convenience, gaps in real-time oversight are creating hidden risks for businesses.
Digital wallets are changing how employees pay for work expenses. Without direct links to expense systems, transactions can slip through unmonitored. This creates 'mystery spend'—purchases that lack clear merchant details or approvals until long after the fact.
Security remains a key concern as adoption grows. Technologies like tokenisation help protect data by replacing sensitive card details with unique codes. But even with these safeguards, delayed visibility into spending can leave finance teams exposed. When payments bypass real-time checks, policy violations or fraudulent activity may go unnoticed for days or weeks.
The solution, according to experts, lies in integration. Digital wallet transactions should feed straight into expense platforms that log audit trails and request receipts instantly. This approach ensures every payment—whether by physical card, virtual card, Apple Pay, or Google Pay—faces the same controls. Immediate flags for out-of-policy spend could prevent costly errors before they escalate.
Meanwhile, the broader payments landscape is evolving. Real-time processing, virtual cards, and wallet adoption are becoming standard. Yet without proper systems in place, finance teams risk spending more time on manual reconciliations and cleanup work. The ECB's report highlights the scale of change but offers little detail on business wallet use outside the UK and Ireland, leaving gaps in regional data.
The rise of digital wallets brings efficiency but also demands tighter oversight. Businesses must ensure all payment methods—from contactless cards to mobile wallets—are tracked in real time. Without this, the convenience of digital spending could come at the cost of financial control and security.
For now, the UK and Ireland lead in adoption, with cash fading fast. But as wallets spread across Europe, the need for integrated, real-time expense systems will only grow.
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